Today we aim at the beating heart of FS – its IT systems. I am delighted to be joined by Mark Beeston founder of Illuminate Financial who has over two decades of hardcore FS experience trading derivatives, COO- and CEO-ing, to discuss Capital Markets Fintech.

A lot of Fintech is B2C, some is B2B but there is a whole chunk trading under the Fintech rubric which aims not to disrupt the provision of FS but rather enhance the incumbents. Disrupting existing IT vendors to FS not FS.

Illuminate Financial are Capital Markets VCs extraordinaire. Their claim is “we cross the chasm between enterprise Fintech and the Financial Institutions it should serve”. I can do no better than quote further re where this gulf comes from:

Regulation is increasing, the industry is deleveraging, and compliance is becoming ever stricter.

Financial institutions have been slow to adopt new technologies, while vendor management and procurement processes are focused on contracting multi-million dollar enterprise solutions from billion dollar corporations.

In doing so, they often overlook the innovative lower cost and highly scalable solutions offered by newer and more entrepreneurial suppliers.

Organisations know that the answers may lie in Fintech. Yet the ever-growing hype around the subject has made it more and more difficult to distil the signal from the noise.”

Topics discussed include:

investing and dealing in cars

driving taxis

560hp Audi Estates

the seminal importance of the 2005 derivatives crisis to Mark and setting up ICE Link and experiencing how hard it was for folks to sell him IT systems he needed

the changing nature and timescales of B2B FS IT sales processes in recent decades & years

challenges of current sales

the flipside is greater product stickiness once it’s in

the heterogeneous nature of incumbents – not painting them all with one brush

the over-emphasis on innovation

Illuminate’s great model INNOVATE – VALIDATE – ADOPT in this context

they have seen 1,200 companies since starting the firm – hence there is masses of innovation out there – a lack of innovation is not the problem in FS

Mark’s suggestions about how to structure innovation/validation in incumbents

“West coast corporate tourism”

opposite cultures of say SpaceX and incumbent FS – lessons are not transferable [not least of which the product in FS is money]

“there’s an unprecedented number of problems that need solving right now”